Interesting article popped up on my feed with corroborated info suggesting the near still birth of Sigmar and the death throes of the Kirby era brought GW closer to the brink than I'd suggest even the most ardent black knights may have suspected.
Falling model sales between 2014 and 2016 put such strain on Games Workshop’s cashflow that it came within “four to six weeks” of “having to lock the doors”, according to former GW Senior Hobby Products designer Tom Hibberd. Hibberd makes the claim in a video interview with The Painting Phase YouTube channel, while explaining the development of innovative Warhammer 40k hobby products including the Contrast Paints line.
So is he alleging GW management intentionally misinformed the shareholders as to the actual state of the company at the time? Because I remember people pulling GW's financial statements apart during that period and this supposed near death experience was nowhere to be seen back then.
Azreal13 wrote: Interesting article popped up on my feed with corroborated info suggesting the near still birth of Sigmar and the death throes of the Kirby era brought GW closer to the brink than I'd suggest even the most ardent black knights may have suspected.
Falling model sales between 2014 and 2016 put such strain on Games Workshop’s cashflow that it came within “four to six weeks” of “having to lock the doors”, according to former GW Senior Hobby Products designer Tom Hibberd. Hibberd makes the claim in a video interview with The Painting Phase YouTube channel, while explaining the development of innovative Warhammer 40k hobby products including the Contrast Paints line.
Ahoy! AHOY!!!!!
This is 2023 calling. From the present.
None of this is even remotely news. Or rumour.
GW as a company had of course had its ups and downs. There’s no denying that. Because rather helpfully, being a UK PLC they have to not only publish their financials, but subject them to impartial auditing.
You want to know what buries most PLC’s? Debts being called in. GW, as their own verified figures confirm, have always been debt adverse.
No of course I don’t want you to simply take my word for it. I’m just some spanker on the internets. But hey! Check this!
I'm not surprised. The Kirby years after the LotR bubble burst were all about making money by cutting costs and raising prices. And they were running out of costs to cut.
Even if the financials didn’t support at the time?
Being pretty much, if not completely, debt free? GW would never have been “fOuR tO sIx WeEkS fRoM lOcKiNg TeH dOrS”, because that’s not how business and business lending works.
There's a story my old Business lecturer told me about an exercise set for some finance students in America.
They were tasked with examining a company's accounts and making a decision on whether they felt they were a sound risk to lend money to. Once the class had more or less unanimously agreed the company was safe to lend to, the lecturer revealed that the company had gone into administration the following day.
Moral of the story being that the numbers don't always tell the story.
Lol at a senior product designer for GW and Chris Peach being called a dubious source though, I knew you wouldn't let me down Grotsnik.
Being pretty much, if not completely, debt free? GW would never have been “fOuR tO sIx WeEkS fRoM lOcKiNg TeH dOrS”, because that’s not how business and business lending works.
I don't disagree, just stating that it's one person's statement that isn't back up by the years of verified evidence we have access to.
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Azreal13 wrote: Moral of the story being that the numbers don't always tell the story.
Lol at a senior product designer for GW and Chris Peach being called a dubious source though, I knew you wouldn't let me down Grotsnik.
It's not just the numbers. We have evidence GW in those years took out a single debt(to pay dividends) and that was almost immediately paid back.That's not something a company "4-6 weeks from closing the doors" is able to do.
Platuan4th wrote: As MDG says, the financials even around that time don't support the claim.
For statements like 'four to six weeks to closing doors' you'd have to consider that almost all people have absolutely no frame of reference to judge these. Corporate payroll engineering and cash management is a domain for experts, and many companies rely on specific, revolving lines of credit to manage that because in aggregrate it's more convenient and economic to use these than other methods available. So, is four to six weeks (of what, precisely? Cash flow? Cash flow balance? Cash and cash-equivalent reserves on hand divided by daily cash outflow? and so on) high? Low? Industry standard? Exceptionally good? I have no idea, and neither has the average viewer. Even from inside management, if you have no specific insights into these departments and their models, numbers can look alarming but be fine, or on the other hand look ok and be the cause for a five-alarm fire.
Azreal13 wrote: There's a story my old Business lecturer told me about an exercise set for some finance students in America.
They were tasked with examining a company's accounts and making a decision on whether they felt they were a sound risk to lend money to. Once the class had more or less unanimously agreed the company was safe to lend to, the lecturer revealed that the company had gone into administration the following day.
Moral of the story being that the numbers don't always tell the story.
Lol at a senior product designer for GW and Chris Peach being called a dubious source though, I knew you wouldn't let me down Grotsnik.
And I've been in multiple history classes over the years where we voted Hitler into power because he didn't drink or eat meat.
Sometimes students aren't the best people to make decisions.
The obvious question to ask would be "how did they end up not running out of cashflow then?"
To which the answer probably was "well it wasn't as bad as all that".
Pretty clear 2014-16 was not a healthy time for GW - but equally, from the accounts, they were stagnating, not drowning. A short term cash crisis is however entirely possible if there were some lean months without much going on. I think they turned the corner with the Deathwatch Overkill box (Feb 2016?).
Azreal13 wrote: There's a story my old Business lecturer told me about an exercise set for some finance students in America.
They were tasked with examining a company's accounts and making a decision on whether they felt they were a sound risk to lend money to. Once the class had more or less unanimously agreed the company was safe to lend to, the lecturer revealed that the company had gone into administration the following day.
Moral of the story being that the numbers don't always tell the story.
Lol at a senior product designer for GW and Chris Peach being called a dubious source though, I knew you wouldn't let me down Grotsnik.
And I've been in multiple history classes over the years where we voted Hitler into power because he didn't drink or eat meat.
Sometimes students aren't the best people to make decisions.
That really wasn't the takeaway I intended, but never mind.
Azreal13 wrote: There's a story my old Business lecturer told me about an exercise set for some finance students in America.
They were tasked with examining a company's accounts and making a decision on whether they felt they were a sound risk to lend money to. Once the class had more or less unanimously agreed the company was safe to lend to, the lecturer revealed that the company had gone into administration the following day.
Moral of the story being that the numbers don't always tell the story.
Lol at a senior product designer for GW and Chris Peach being called a dubious source though, I knew you wouldn't let me down Grotsnik.
Peachy relies on clicks to feed his kids, he's absolutely a dubious source.
Azreal13 wrote: There's a story my old Business lecturer told me about an exercise set for some finance students in America.
They were tasked with examining a company's accounts and making a decision on whether they felt they were a sound risk to lend money to. Once the class had more or less unanimously agreed the company was safe to lend to, the lecturer revealed that the company had gone into administration the following day.
Moral of the story being that the numbers don't always tell the story.
Lol at a senior product designer for GW and Chris Peach being called a dubious source though, I knew you wouldn't let me down Grotsnik.
Peachy relies on clicks to feed his kids, he's absolutely a dubious source.
I would not call anyone dubious per se, but it get's a bit repetitive to have an ex-GW insider on every couple of months to wash semi-dirty laundry from years and years ago. It does not give that much genuine insight beyond the common knowledge that company culture there was cultish, sometimes nonsensical and in general fethed-up during the Kirby era, and has a bit of a flair of spurned lovers bitching about their exes to a receptive audience. It probably is bringing in the clicks, but so is trash TV.
Why would the former Senior Product Designer say the things he said if they weren't true? He's a guest, it's not his channel, he's not there for clicks, I doubt he's been paid.
The simple explanation for this is that these guys were taken into a meeting & told by senior management that GW had 4-6 weeks cashflow remaining, and they needed to come up with ideas to save their jobs. Doesn't mean that 4-6 figure was actually true.
xttz wrote:The simple explanation for this is that these guys were taken into a meeting & told by senior management that GW had 4-6 weeks cashflow remaining, and they needed to come up with ideas to save their jobs. Doesn't mean that 4-6 figure was actually true.
Azreal13 wrote:That's not in the least bit simple. Its predicated on senior managers outright deceiving and manipulating other senior managers.
What does a Product Designer have to do with daily cashflow and payroll figures? It's vastly more likely that he got this specific numbers either in a all-hands meeting, where it might have been couched in all sorts of relevant information and caveats that did not really stick to memory (something like 'At one point, our predicitions said we would be within 4-6 of having to close shop, but...' or whatever) or heard it through the grapevine while talking to colleagues from other branches of management or something like that. It would not have been directly in his area of supervision or field of work, so i think it might be more likely that he misunderstood, misheard or misremembered something than GW outright cooking the books for their mandatory reporting.
Azreal13 wrote: That's not in the least bit simple. Its predicated on senior managers outright deceiving and manipulating other senior managers.
I can entirely believe one set of executives would deceive another set of business executives, even in the same company. I'm not sure what world you've been living in to make you think they wouldn't.
Furthermore, it is predicated on the business executives running the company deceiving the manager of the creatives. I'd say it is senior managers deceiving middle managers.
I'd suspect the truth is somewhere in the middle, and that there was an internal fear about tanking, but not within such a short time frame, but that it became exaggerated at the time and moreso in the years since.
Everybody on the show actually worked for GW at some point, so it's actual inside info and not some outside internet guesses at the secret inner workings of the company. Clickbait titles are a deliberate running gag, usually something they joke about during the first few minutes of the show. They're also all FORMER employees, so they don't shy away from the aspects of working for GW that were crap or when they disagree with GW practices.
Y'all should actually WATCH the video, it's a 2 hour interview and the "4-6 weeks from failure" is really short part of it, most of the show is a bunch of insiders talking about the inner workings of how the different hobby tools and paints production and procurement went about. Why doesn't GW do dropper bottles? Why don't they do wet palletes? Why the Spray Gun but no airbrush? Why don't they make X, Y or Z? Tom lays it all out pretty well, it's unsurprisingly always money and target customer base, but it's nice to actually hear it laid out from smebody that was involved and not just a internet rando making a guess.
Watched it while painting the other night, I found it really fascinating
Kalamadea wrote: Everybody on the show actually worked for GW at some point, so it's actual inside info and not some outside internet guesses at the secret inner workings of the company. Clickbait titles are a deliberate running gag, usually something they joke about during the first few minutes of the show. They're also all FORMER employees, so they don't shy away from the aspects of working for GW that were crap or when they disagree with GW practices.
Y'all should actually WATCH the video, it's a 2 hour interview and the "4-6 weeks from failure" is really short part of it, most of the show is a bunch of insiders talking about the inner workings of how the different hobby tools and paints production and procurement went about. Why doesn't GW do dropper bottles? Why don't they do wet palletes? Why the Spray Gun but no airbrush? Why don't they make X, Y or Z? Tom lays it all out pretty well, it's unsurprisingly always money and target customer base, but it's nice to actually hear it laid out from smebody that was involved and not just a internet rando making a guess.
Watched it while painting the other night, I found it really fascinating
I watched it too, agreed that it was fascinating.
It's amazing to me how the information being shared here is being gakked on, especially when you consider the source.
Y'all should actually WATCH the video, it's a 2 hour interview and the "4-6 weeks from failure" is really short part of it,
We're talking about that part specifically because this thread and the article in the OP is literally about that part specifically, not the whole video.
Tyel wrote: The obvious question to ask would be "how did they end up not running out of cashflow then?"
To which the answer probably was "well it wasn't as bad as all that".
Pretty clear 2014-16 was not a healthy time for GW - but equally, from the accounts, they were stagnating, not drowning. A short term cash crisis is however entirely possible if there were some lean months without much going on. I think they turned the corner with the Deathwatch Overkill box (Feb 2016?).
Yeah, but you'll never get people watching your YouTube channel talking like that.
And I agree with others that a senior product designer would almost certainly NOT know or understand all the complexities of a multinational company's finances. It's highly possible that the company had some cash flow issues and he was told that, but the way it was described here just doesn't seem very plausible.
The actual quote is "I think at one point they were about four, or four to six weeks out of running out of cash flow", and then Peachy says "I do remember there was a manager meeting where they discussed it and saying that we are 15 million in debt".
So, cash flow, which is an issue rich people run into frequently and it's a problem of liquidity, not of actual money, and (for that size of company) small debt (probably, as MDG said, to pay dividends). It doesn't seem too implausible to me, and I don't feel like it runs counter with the public figures.
Azreal13 wrote: They don't have to have lied for it still to be true.
It can be true and not be a big deal, too - if it was just before taking that loan to pay dividends, it would still have been a major event for the corporation (because they would have to give up their usual policy of not taking outside loans for once) that led to internal changes and re-organisations without really threatening it directly (because their stance on loans is much more conservative than almost any business, a flat-out luxury problem/belief).
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
They don't have to, which I think those that are clutching their pearls over this don't quite get.
They can start the year with £15m cash in the bank, within 6 months they can have spent the £15m, gone £15m into their overdraft and be really feeling the pinch.
If on the last day of their financial year they're £15m in the black again, you just don't see the massive crisis that happend in the middle because that's outside of the scope of the report.
You'd need bank statements to see that, and that's something we're not privy to as customers or investors.
Since you're obviously smart about Financials, how much money you think they made with that "clickbait" with the clicks and views?
Couldn't tell you, but I will say this video is the first time this channel has ever appeared in my feed, so I'd guess it was worth more than average for them.
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
The external auditor would have had to assist with the lie too. Both them and GW would also have to be lying over something that was literally no benefit to anyone except in a dumb Internet argument a decade later.
Which makes it significantly more likely that Tom's quote is some kind of exaggeration or misunderstanding.
Azreal13 wrote: They don't have to have lied for it still to be true.
I don't really understand why it stirred up such a hornets nest, but there you go.
The thread title gives it away - it's like nerd-nip, the absolute dream scenario: outside evidence provided by an impartial authority directly tells you that you were right all along on a topic that had been argued with vitriol all those years ago. Few can withstand such a temptation
Hardly surprising and entirely believable. I remember plenty of posts from the time period saying they can't cut costs further as they'll be cutting through meat and bone. There was a fella on Warseer, whose name escapes me, that went quite deep into the financials at the time and he was persistant in warning that they look broadly healthy "now" but can't keep going down the path they are forever.
And doubtless, you will find plenty of stories of profitable business which suddenly run out of cash because of bad decisions, poor sales, or some other unforseen problem.
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
What are you referring to? What have they done before?
I think it was meant to be a more general statement about the things corporations do.
That being said, people, please use common sense and weigh your probabilities a bit - a simple misunderstanding, mishearing a sentence or embellishing the details a bit after all those years is much more likely than literal fraud to cover up what amounts to a cashflow hickup... it's not a movie script where every single corporate employee is a step away from slaughtering orphans, these people have jobs and don't want to got to jail for the benefit of the firm at large, it's just not worth it to a bookkeeper who has nothing in particular to gain from misreporting things
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
What are you referring to? What have they done before?
Corporate in my post refers to "any corporates" rather than just GW. You'd be naive to believe anyone running a company that large was a stand up person with their morality intact though.
Since you're obviously smart about Financials, how much money you think they made with that "clickbait" with the clicks and views?
Couldn't tell you, but I will say this video is the first time this channel has ever appeared in my feed, so I'd guess it was worth more than average for them.
So you agree, you don't really know if that click bait worked just because YOU saw this podcast for the first time.
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
What are you referring to? What have they done before?
I think it was meant to be a more general statement about the things corporations do.
That being said, people, please use common sense and weigh your probabilities a bit - a simple misunderstanding, mishearing a sentence or embellishing the details a bit after all those years is much more likely than literal fraud to cover up what amounts to a cashflow hickup... it's not a movie script where every single corporate employee is a step away from slaughtering orphans, these people have jobs and don't want to got to jail for the benefit of the firm at large, it's just not worth it to a bookkeeper who has nothing in particular to gain from misreporting things
That's not what we do here dammit! Drama or nothing!
could quite easily be "4-6 weeks from locking the doors", not because of cashflow or similar
but because those who own the business will close it down while there is still money in the bank to walk away with if they think a few months later it will close anyway and there won't be
not saying its the case here but I have seen that happen
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
What are you referring to? What have they done before?
I think it was meant to be a more general statement about the things corporations do.
Doesn't come across like that to me considering he specifically said "Corporate", implying GW rather than just the vague idea of corporations in general.
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
What are you referring to? What have they done before?
Corporate in my post refers to "any corporates" rather than just GW. You'd be naive to believe anyone running a company that large was a stand up person with their morality intact though.
It has not much to do with morale, though. Falsifying investor reports is a pretty serious crime, has a good chance to be caught immediately, usually produces additional problems down the road because a single round of falsification is usually not enough to deal with an ongoing, unsolved problem, so the discrepancies between books and reality tend to grow and grow, and when (not if) you get caught it's jail-time and loss of employment (possibly forever) for those in the know and usually ruinous fines for the company. The system is set up extremely harsh on purpose, to make it really unattractive to try stuff like that.
I feel like it's far more likely that this is either a misunderstanding, misremembering, a hyopthetical they were told or something along those lines rather than having either lied and committed a crime or it actually having been the case but conveniently somehow got solved in such a short time period that it doesn't show up in the financial reports.
I'd be very surprised if none of you have worked in companies where exaggerated rumours took on a life of their own,even amongst middle ranking management. That seems to be what is happening here. There's that famous old saying that a little knowledge is sometimes more dangerous than no knowledge. No doubt people knew the company was struggling at the time and it got exaggerated.
A FTSE250 listed company, that is the leading wargames manufacturer in the world, sitting on a trove of IP that was well regarded even in 2016, even pre the modern renaissance of the company does not beome '4-6 weeks from closing down' without some of that information becoming public. Furthermore if things truly were that bad, they would not struggle to find a loan facility with one of the UK's big banks or outside investment. Even during the Gorkmorka fiasco in the late 90s, when the company was smaller, less known worldwide and more vulnerable it didn't get to the stage of being '4-6 weeks from locking the doors'. This is not my personal opinion it's simple logic, anyone with a bit of business knowledge would know this.
The only way this could have happened is some kind of financial/accounting scandal matching the collapse of Carillion etc, that's the only way such a cashflow issue could have occurred out of nowhere without the company seeking relatively easily found solutions. There is no evidence of this happening at all. This is also ignoring all the public financial information that GW published during this period, which other posters have already cited.
I hated the late Kirby era (people do forget that he did have some successful ideas in the 90s), I hated the way they killed WHFB, I hated the cack handed way they handled the launch of AOS and I hated their approach to the community at the time. Despite all this, GW were not close to financial collapse.
Londinium wrote: I'd be very surprised if none of you have worked in companies where exaggerated rumours took on a life of their own,even amongst middle ranking management. That seems to be what is happening here. There's that famous old saying that a little knowledge is sometimes more dangerous than no knowledge. No doubt people knew the company was struggling at the time and it got exaggerated.
A FTSE250 listed company, that is the leading wargames manufacturer in the world, sitting on a trove of IP that was well regarded even in 2016, even pre the modern renaissance of the company does not beome '4-6 weeks from closing down' without some of that information becoming public. Furthermore if things truly were that bad, they would not struggle to find a loan facility with one of the UK's big banks or outside investment.
Even during the Gorkmorka fiasco in the late 90s, it didn't get to the stage of being '4-6 weeks from locking the doors'.
This is ignoring all the publically cited financial information that GW published during this period, which other posters have already cited.
I’ve had worse.
No. Really.
Proper proper Hatchet Job by Channel 4’s “Dispatches”. Not saying that show was the result of dishonest journalism, but any colleague could spot where the answer given just didn’t match the question apparently asked.
I think the Exec actually sued, but in a shocking display of honesty for this thread? I can’t say if that was just a staff rumour or not.
Londinium wrote: I'd be very surprised if none of you have worked in companies where exaggerated rumours took on a life of their own,even amongst middle ranking management. That seems to be what is happening here. There's that famous old saying that a little knowledge is sometimes more dangerous than no knowledge. No doubt people knew the company was struggling at the time and it got exaggerated.
A FTSE250 listed company, that is the leading wargames manufacturer in the world, sitting on a trove of IP that was well regarded even in 2016, even pre the modern renaissance of the company does not beome '4-6 weeks from closing down' without some of that information becoming public. Furthermore if things truly were that bad, they would not struggle to find a loan facility with one of the UK's big banks or outside investment. Even during the Gorkmorka fiasco in the late 90s, it didn't get to the stage of being '4-6 weeks from locking the doors'. This is not my personal opinion it's simple logic, anyone with a bit of business knowledge would know this.
The only way this could have happened is some kind of financial/accounting scandal matching the collapse of Carillion etc, that's the only way such a cashflow issue could have occurred out of nowhere without the company seeking relatively easily found solutions. There is no evidence of this happening at all. This is also ignoring all the public financial information that GW published during this period, which other posters have already cited.
I hated the late Kirby era (people do forget that he did have some successful ideas in the 90s), I hated the way they killed WHFB, I hated the cack handed way they handled the launch of AOS and I hated their approach to the community at the time. Despite all this, GW were not close to financial collapse.
All that aside, the only time I've ever sat in a meeting with senior management and been told we were in financial trouble, we were in financial trouble.
Ultimately things worked out, at least for a year or two, but there's a whole world of difference between hearing a rumour, and being sat in the meeting, which is what's discussed here.
You can look at your forecast earnings, your market growth and all your other numbers and decide that its better to simply cease production and close down - or close down a significant portion of the company; or start a shutdown process of winding up departments and projects.
It might be that Management was considering a shut down at one stage as one option instead of re-investment so that they could close down and leave the firm with money in their pockets instead of pushing on. Esp a firm that has a policy of not taking out loans and thus the option of taking out a loan isn't on the cards.
It might even be that one set of forecasts predicted that they'd have to strip significant portions of the firm to reduce costs so that they could cut losses to have enough money to re-invest and continue on with a portion of the firm.
These are all things that could have been discussed and might have filtered down to staff outside of upper management meetings and quickly boiled down to the quick statement of 1-2months and we could be shut down.
It could also just be the "worst case" financial predictions that were potentially possible and were more possible because of their weakened position, but were not as likely to happen as other financial predictions.
In the end GW didn't close down; they didn't burn; in fact they turned around in what I think is one of the best displays of a firm adjusting their policies, practice and interaction and customer input and all.
RaptorusRex wrote: As has been stated elsewhere, GW couldn't have lied without breaking the law.
And this would be the first time corporate broke the law?
They don't have to, which I think those that are clutching their pearls over this don't quite get.
They can start the year with £15m cash in the bank, within 6 months they can have spent the £15m, gone £15m into their overdraft and be really feeling the pinch.
If on the last day of their financial year they're £15m in the black again, you just don't see the massive crisis that happend in the middle because that's outside of the scope of the report.
You'd need bank statements to see that, and that's something we're not privy to as customers or investors.
I used to work for a marine company that owned many companies about 10 years ago. I worked in the office under the owner and had to dip my toes in all sorts of roles. One thing I found a bit distasteful and wrong was report manipulation. One that stands out is when selling a company, its not uncommon for the seller to run his business at unattainable levels for more profit for a period (usually a year from my limited experience) before selling, to inflate its on paper worth. Without actually visiting the business with some understanding of the industry you're buying, it's impossible to see from reports alone the health of a company. A hobby example of this, I think War Cradle purchased Spartan Games when it was going bankrupt. When it started taking years for any of the Spartan IPs to be used, they released a post talking about how much of a mess Spartan Games was and they didn't know when buying it. They didn't realize until after the purchase. I suspect reporting hid much of the problems which would later become evident with ownership.
Now my career is completely different to the one I started being mentored in, but in my 6 years there I got a small insight to that world. Being profitable on its own does not actually tell you the full story, so if you're buying a business don't be impressed with profit margins without scrutiny. It's always in peoples interest to make things look better than they are when money depends on it.
I don't think it's that difficult to understand that being "former GW employees" doesn't make this objectively correct just because of that. They may very well have been told this or something along those lines at the time, but without any actual evidence beyond that then taking it at face value as being outright the case irrefutably is a bit odd. This is what someone, who wasn't directly involved in that financial aspect themselves, would have been told by others at that time so someone or something could easily have been a misunderstanding, misinformed, misremembering, hypothetical etc.
To me at least, anecdotal evidence of an employee who was there years ago doesn't override what properly audited financial reports and information shown to investors suggests was the case.
Swastakowey wrote: A hobby example of this, I think War Cradle purchased Spartan Games when it was going bankrupt. When it started taking years for any of the Spartan IPs to be used, they released a post talking about how much of a mess Spartan Games was and they didn't know when buying it. They didn't realize until after the purchase. I suspect reporting hid much of the problems which would later become evident with ownership.
Spartan Games were in a mess, but part of it is that they went into liquidation and administration. They weren't sold/sellout, they were auctioned off.
As a result there wasn't really any part of SG trying to make the numbers look good, they simply fell apart and went into liquidation. So part of the mess is that some parts were missing because they'd been cutting costs to try and survive. I seem to recall that the inventory software that catalogued which mouldparts went together and made what was not upkept for a while because they cut paying for the software licence. Another is that because it fell apart they got stuff like moulds on a pallet just chucked on there; some items were missing from the inventory and it was just a huge mess.
Likely because some items got lost between shutting down and the administrators walking into strip assets and likely because some were just packaged up by the court and not by the company and soforth.
It certainly wasn't a clean company sale like when the company behind Dropzone/fleet sold to stay afloat and such.
Y'all should actually WATCH the video, it's a 2 hour interview and the "4-6 weeks from failure" is really short part of it,
We're talking about that part specifically because this thread and the article in the OP is literally about that part specifically, not the whole video.
So you should just read the title of a news article and not the article itself, right? And then you should argue with others using ONLY the info gleaned from the title, no need to read the actual article for context? No need to go to the original source either, right?
None of the "discussion" regarding the financials actually matters, it's all just armchair internet accountants arguing over whose take on incomplete info is better. Whether the "4-6 Weeks from Doom" was a literal timeline or an exageration from corporate management to push sales, GW obviously survived it. The video is about how Tom's department of the company responded to bad sales. How they came up with products, why they chose what products to use and which to rebrand vs recreate in-house. The title of this thread and the article linked are just clickbait throwaways, at least the clickbait-titled video has firsthand anecdotes backing it up. The real value here is finding out why the GW painting handle fits your camera equipment. The real value is why your corax white separates into black oil, then goes white again when you shake it. The real value is why GW dice used the 1s for the special symbols for years and years until suddenly they didn't, and why they got rid of Badaab Black and Devlan Mud.
Devlan Mud being discontinued because it had too many organic compounds and would rot in the pot has much more of a direct affect on my hobbying than Mad Doc Grotsnik arguing cash flow vs net worth with Azreal13, and is a FAR more interesting bit of news.
Swastakowey wrote: A hobby example of this, I think War Cradle purchased Spartan Games when it was going bankrupt. When it started taking years for any of the Spartan IPs to be used, they released a post talking about how much of a mess Spartan Games was and they didn't know when buying it. They didn't realize until after the purchase. I suspect reporting hid much of the problems which would later become evident with ownership.
Spartan Games were in a mess, but part of it is that they went into liquidation and administration. They weren't sold/sellout, they were auctioned off.
As a result there wasn't really any part of SG trying to make the numbers look good, they simply fell apart and went into liquidation. So part of the mess is that some parts were missing because they'd been cutting costs to try and survive. I seem to recall that the inventory software that catalogued which mouldparts went together and made what was not upkept for a while because they cut paying for the software licence. Another is that because it fell apart they got stuff like moulds on a pallet just chucked on there; some items were missing from the inventory and it was just a huge mess.
Likely because some items got lost between shutting down and the administrators walking into strip assets and likely because some were just packaged up by the court and not by the company and soforth.
It certainly wasn't a clean company sale like when the company behind Dropzone/fleet sold to stay afloat and such.
Ah yeah, I remember reading about it years ago and got a chuckle out of the state of Spartan Games.
Its entirely possible GW to have gone "we have £10m in the bank, over the next 4-6 weeks we are forecasting spend of £15m (on staff, new inventory, rent, rates etc), but our revenue is only looking like £5m.
£10m+£5m-£15m=£0m. Therefore we are only 4-6 weeks away from being insolvent. We'll have a lot of stock floating round the world - but its not selling and turning into cash fast enough to meet our outgoings.
But its only a forecast. Have crisis meetings. Trim spending. Try and push sales. Maybe take out small loans. Net result in 4-6 weeks the cash in the bank doesn't go to zero.
And the next 6 weeks after that are better. You sell inventory for cash, and don't spend as much. Revenue from selling stock exceed spending, so the cash in the bank recovers. Since you only have to report on what it is at year end, this blip isn't going to appear.
Tyel wrote: Its entirely possible GW to have gone "we have £10m in the bank, over the next 4-6 weeks we are forecasting spend of £15m (on staff, new inventory, rent, rates etc), but our revenue is only looking like £5m.
£10m+£5m-£15m=£0m. Therefore we are only 4-6 weeks away from being insolvent. We'll have a lot of stock floating round the world - but its not selling and turning into cash fast enough to meet our outgoings.
But its only a forecast. Have crisis meetings. Trim spending. Try and push sales. Maybe take out small loans. Net result in 4-6 weeks the cash in the bank doesn't go to zero.
And the next 6 weeks after that are better. You sell inventory for cash, and don't spend as much. Revenue from selling stock exceed spending, so the cash in the bank recovers. Since you only have to report on what it is at year end, this blip isn't going to appear.
Or? Being demonstrably solvent you apply for an overdraft, overdraft extension or bridging loan.
To be “five to six weeks” from closing the doors, you need to be not only knee deep in the muck, but leveraged to the hilt to boot.
Swastakowey wrote: A hobby example of this, I think War Cradle purchased Spartan Games when it was going bankrupt. When it started taking years for any of the Spartan IPs to be used, they released a post talking about how much of a mess Spartan Games was and they didn't know when buying it. They didn't realize until after the purchase. I suspect reporting hid much of the problems which would later become evident with ownership.
Spartan Games were in a mess, but part of it is that they went into liquidation and administration. They weren't sold/sellout, they were auctioned off.
As a result there wasn't really any part of SG trying to make the numbers look good, they simply fell apart and went into liquidation. So part of the mess is that some parts were missing because they'd been cutting costs to try and survive. I seem to recall that the inventory software that catalogued which mouldparts went together and made what was not upkept for a while because they cut paying for the software licence. Another is that because it fell apart they got stuff like moulds on a pallet just chucked on there; some items were missing from the inventory and it was just a huge mess.
Likely because some items got lost between shutting down and the administrators walking into strip assets and likely because some were just packaged up by the court and not by the company and soforth.
It certainly wasn't a clean company sale like when the company behind Dropzone/fleet sold to stay afloat and such.
Ah yeah, I remember reading about it years ago and got a chuckle out of the state of Spartan Games.
It's a huge shame they went they way they did; they designed some phenomenal models. Sadly they got locked into a "new hotness" release pattern which resulted in them having so many factions for so many games. The Halo licence also didn't help them as, again, it was yet another big thing that they had to manage and upkeep. So many systems and not enough resources to keep up with them all. I also recall their CEO was ill for quite a time before their downfall, which in a small firm where everyone does a bit of everything; likely didn't help them at all.
Warcradle are doing really well now and they are pushing better designs and modular plastics and such. It's in a good place and growing once again, but you can certainly see that there's a style shift. Not better not worse just a different focus.
Swastakowey wrote: A hobby example of this, I think War Cradle purchased Spartan Games when it was going bankrupt. When it started taking years for any of the Spartan IPs to be used, they released a post talking about how much of a mess Spartan Games was and they didn't know when buying it. They didn't realize until after the purchase. I suspect reporting hid much of the problems which would later become evident with ownership.
Spartan Games were in a mess, but part of it is that they went into liquidation and administration. They weren't sold/sellout, they were auctioned off.
As a result there wasn't really any part of SG trying to make the numbers look good, they simply fell apart and went into liquidation. So part of the mess is that some parts were missing because they'd been cutting costs to try and survive. I seem to recall that the inventory software that catalogued which mouldparts went together and made what was not upkept for a while because they cut paying for the software licence. Another is that because it fell apart they got stuff like moulds on a pallet just chucked on there; some items were missing from the inventory and it was just a huge mess.
Likely because some items got lost between shutting down and the administrators walking into strip assets and likely because some were just packaged up by the court and not by the company and soforth.
It certainly wasn't a clean company sale like when the company behind Dropzone/fleet sold to stay afloat and such.
FASA unexpectedly ceased active operations in early 2001. Contrary to popular belief, the company did not go bankrupt; it still exists as a corporation holding IP rights which it licenses to other publishers. According to the owners, they decided to quit while the company was still financially sound in a market they perceived as going downhill. Mort Weisman had been talking of retirement for some years and his confidence in the future of the paper-based games business was low.
Azreal13 wrote: Once more, and for the last time, both what is asserted by the guys in the video and the GW financial reports for the equivalent period can be true.
I am not, and, go back and look, never have, disputed the veracity of the end of year reports.
They can't both be true due to many of the things MDG listed above, but one in particular, who you and your side of the argument undervalue greatly.
GW had no to little debt.
4-6 weeks of liquidity left is not the same thing as 4-6 weeks to bankruptcy. Liquidity crisis can only be deadly if, and only if, you can't get a short term loan from anywhere, usually because you're drowning in debt already. Public company the size of GW, with their IP, with audited financial reports clean as theirs were, can go and get such a loan literaly anywhere they like. What is more - GW, even back then, would be welcomed in any investment bank in the world if they ever wanted to change their finance model from their self-financed-growth to growth-from-perpetual-debt. Companies with such healthy finances as GW has, had and will have as long as they are dominantly self-financed, have years long eventual downward spirals ahead of them.
This whole thread is just a haters wet dream and nothing else. And yes, two guys, even insiders, talking on the podcast about topics they were not responsible for, and which are completely outside their areas of expertise, are not even in the same league of credibility as official financial reports of public company.
Swastakowey wrote: A hobby example of this, I think War Cradle purchased Spartan Games when it was going bankrupt. When it started taking years for any of the Spartan IPs to be used, they released a post talking about how much of a mess Spartan Games was and they didn't know when buying it. They didn't realize until after the purchase. I suspect reporting hid much of the problems which would later become evident with ownership.
Spartan Games were in a mess, but part of it is that they went into liquidation and administration. They weren't sold/sellout, they were auctioned off.
As a result there wasn't really any part of SG trying to make the numbers look good, they simply fell apart and went into liquidation. So part of the mess is that some parts were missing because they'd been cutting costs to try and survive. I seem to recall that the inventory software that catalogued which mouldparts went together and made what was not upkept for a while because they cut paying for the software licence. Another is that because it fell apart they got stuff like moulds on a pallet just chucked on there; some items were missing from the inventory and it was just a huge mess.
Likely because some items got lost between shutting down and the administrators walking into strip assets and likely because some were just packaged up by the court and not by the company and soforth.
It certainly wasn't a clean company sale like when the company behind Dropzone/fleet sold to stay afloat and such.
Ah yeah, I remember reading about it years ago and got a chuckle out of the state of Spartan Games.
It's a huge shame they went they way they did; they designed some phenomenal models. Sadly they got locked into a "new hotness" release pattern which resulted in them having so many factions for so many games. The Halo licence also didn't help them as, again, it was yet another big thing that they had to manage and upkeep. So many systems and not enough resources to keep up with them all. I also recall their CEO was ill for quite a time before their downfall, which in a small firm where everyone does a bit of everything; likely didn't help them at all.
Warcradle are doing really well now and they are pushing better designs and modular plastics and such. It's in a good place and growing once again, but you can certainly see that there's a style shift. Not better not worse just a different focus.
Yeah I was huge into Planetfall and Firestorm. Just the other month I sold my fleets and ground forces after many, many years of use. Im waiting for firestorm from warcradle. However I have seen the dystopian fleet plastics and im in 2 minds, I don't like the style that much but on a technical level the models are great. So if they can get the style for Firestorm i'll be happy.
Further on how the world of banking and borrowing works.
One can have unsecured debt, and still obtain secured debt. Because the two are different considerations. As is Guaranteed Debt.
With unsecured debt? The banks absolutely will get their bit by hook or by crook. This is the highest risk category of course, and Their Bit might be a mere fraction of the principle sum, depending exactly how deep in the mire the borrower ended up.
Secured Debt is less risky. The most common form of secured debt would be a Mortgage. If for whatever reason the borrower can no longer service the debt? The lender takes possession of the security. As such, Loan To Value is almost always in the lender’s favour ( as in, if you put up your £150,000 thing, we’ll lend you £50,000) so if they do need to take possession they get their principal sum and interest due back, with a comfortable buffer to absorb the costs incurred in getting to that stage.
Guaranteed Debt is kind of somewhere in the middle. This is where another business or private individual acts as a Guarantor. Super short version of that is the main borrower defaults, the Guarantor is on the hook.
Even in its darkest days? GW, due to super low debt levels, would’ve had all those options open.
And that’s not raking into account Director’s Loans, which are another path to short, mid and even long term cashflow issues.
Good gravy! It’s….it’s as if I really know my onions, isn’t it?
Since you're obviously smart about Financials, how much money you think they made with that "clickbait" with the clicks and views?
Couldn't tell you, but I will say this video is the first time this channel has ever appeared in my feed, so I'd guess it was worth more than average for them.
So you agree, you don't really know if that click bait worked just because YOU saw this podcast for the first time.
I'm not sure I understand. What I'm saying is the algorithm decided this video was popular enough that it should be the one they put in my feed. That likely means it got more views (and therefore generated more money) than other videos from the channel.
To be clear this video started showing up in my feed yesterday or the day before. I didn't come across it on this thread initially.
One can have unsecured debt, and still obtain secured debt. Because the two are different considerations. As is Guaranteed Debt.
With unsecured debt? The banks absolutely will get their bit by hook or by crook. This is the highest risk category of course, and Their Bit might be a mere fraction of the principle sum, depending exactly how deep in the mire the borrower ended up.
Secured Debt is less risky. The most common form of secured debt would be a Mortgage. If for whatever reason the borrower can no longer service the debt? The lender takes possession of the security. As such, Loan To Value is almost always in the lender’s favour ( as in, if you put up your £150,000 thing, we’ll lend you £50,000) so if they do need to take possession they get their principal sum and interest due back, with a comfortable buffer to absorb the costs incurred in getting to that stage.
Guaranteed Debt is kind of somewhere in the middle. This is where another business or private individual acts as a Guarantor. Super short version of that is the main borrower defaults, the Guarantor is on the hook.
Even in its darkest days? GW, due to super low debt levels, would’ve had all those options open.
And that’s not raking into account Director’s Loans, which are another path to short, mid and even long term cashflow issues.
Good gravy! It’s….it’s as if I really know my onions, isn’t it?
I vaguely remember you being professionally in some finance related profession from some old "what do you do for a living" thread or some "off-topic" discussions, when they were still a thing here. Am I correct?
Azreal13 wrote: Once more, and for the last time, both what is asserted by the guys in the video and the GW financial reports for the equivalent period can be true.
I am not, and, go back and look, never have, disputed the veracity of the end of year reports.
They can't both be true due to many of the things MDG listed above, but one in particular, who you and your side of the argument undervalue greatly.
GW had no to little debt.
4-6 weeks of liquidity left is not the same thing as 4-6 weeks to bankruptcy. Liquidity crisis can only be deadly if, and only if, you can't get a short term loan from anywhere, usually because you're drowning in debt already. Public company the size of GW, with their IP, with audited financial reports clean as theirs were, can go and get such a loan literaly anywhere they like. What is more - GW, even back then, would be welcomed in any investment bank in the world if they ever wanted to change their finance model from their self-financed-growth to growth-from-perpetual-debt. Companies with such healthy finances as GW has, had and will have as long as they are dominantly self-financed, have years long eventual downward spirals ahead of them.
This whole thread is just a haters wet dream and nothing else. And yes, two guys, even insiders, talking on the podcast about topics they were not responsible for, and which are completely outside their areas of expertise, are not even in the same league of credibility as official financial reports of public company.
Given the context I more or less took that to be what was intended? We have 4-6 weeks until we have to shut the doors unless we do something.
Much like all of the credible arguments at the time were GW is going to go out of business unless they do something.
You also have to remember that we're taking 8 or so years ago here, end phase Kirby, very early Rountree. Before the COVID bump, before share prices in double figures. GW showed flat to negative growth in this period too, albeit while maintaining a profit and paying a dividend.
There's also the question of the £15m that Peachy mentions, now that could represent a variety of things, but, if true, that represents about 20% of GW's annual turnover at the time.
So while, fundamentally, I agree, if things hadn't transpired as they have, they'd have probably found another solution, GW were, at the time, a shrinking company with a notable liability and, because they don't borrow, no track record for credit. Plus, of course, anything you borrow you have to pay back, and if you're looking at flat to falling sales forecasts that may not fill an accountant with optimism.
Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
Swastakowey wrote: A hobby example of this, I think War Cradle purchased Spartan Games when it was going bankrupt. When it started taking years for any of the Spartan IPs to be used, they released a post talking about how much of a mess Spartan Games was and they didn't know when buying it. They didn't realize until after the purchase. I suspect reporting hid much of the problems which would later become evident with ownership.
Spartan Games were in a mess, but part of it is that they went into liquidation and administration. They weren't sold/sellout, they were auctioned off.
As a result there wasn't really any part of SG trying to make the numbers look good, they simply fell apart and went into liquidation. So part of the mess is that some parts were missing because they'd been cutting costs to try and survive. I seem to recall that the inventory software that catalogued which mouldparts went together and made what was not upkept for a while because they cut paying for the software licence. Another is that because it fell apart they got stuff like moulds on a pallet just chucked on there; some items were missing from the inventory and it was just a huge mess.
Likely because some items got lost between shutting down and the administrators walking into strip assets and likely because some were just packaged up by the court and not by the company and soforth.
It certainly wasn't a clean company sale like when the company behind Dropzone/fleet sold to stay afloat and such.
Ah yeah, I remember reading about it years ago and got a chuckle out of the state of Spartan Games.
It's a huge shame they went they way they did; they designed some phenomenal models. Sadly they got locked into a "new hotness" release pattern which resulted in them having so many factions for so many games. The Halo licence also didn't help them as, again, it was yet another big thing that they had to manage and upkeep. So many systems and not enough resources to keep up with them all. I also recall their CEO was ill for quite a time before their downfall, which in a small firm where everyone does a bit of everything; likely didn't help them at all.
Warcradle are doing really well now and they are pushing better designs and modular plastics and such. It's in a good place and growing once again, but you can certainly see that there's a style shift. Not better not worse just a different focus.
Yeah I was huge into Planetfall and Firestorm. Just the other month I sold my fleets and ground forces after many, many years of use. Im waiting for firestorm from warcradle. However I have seen the dystopian fleet plastics and im in 2 minds, I don't like the style that much but on a technical level the models are great. So if they can get the style for Firestorm i'll be happy.
Some of the styles have grown on me. I think one difference is that Spartan used resin for every model so each model ship class was unique. WC used plastics for core ships and cruisers and frigates use a lot of the same core hulls and parts. So whilst they cover a wide range of ships, they can all look very similar. So it takes a while for them to get to the fancy ships, the unique ones and the different stuff. The more the armies have grown the better its looked in my view because you go from a few ships to a fleet. You start getting the big chunks of detailed resin; the walking titans; the airships and such. Which I think really brings in the visual fun and starts to make factions stand out more.
I'm also hoping for Firestorm - esp since that market is basically ignored. Dropfleet has never taken hold the way it should have considering they got the market handed to them (Gothic has rumbled but never resurfaced and Firestorm fell with Spartan and even if WC get it back it will likely be still a year or two away - giving Dropfleet a huge time alone).
One can have unsecured debt, and still obtain secured debt. Because the two are different considerations. As is Guaranteed Debt.
With unsecured debt? The banks absolutely will get their bit by hook or by crook. This is the highest risk category of course, and Their Bit might be a mere fraction of the principle sum, depending exactly how deep in the mire the borrower ended up.
Secured Debt is less risky. The most common form of secured debt would be a Mortgage. If for whatever reason the borrower can no longer service the debt? The lender takes possession of the security. As such, Loan To Value is almost always in the lender’s favour ( as in, if you put up your £150,000 thing, we’ll lend you £50,000) so if they do need to take possession they get their principal sum and interest due back, with a comfortable buffer to absorb the costs incurred in getting to that stage.
Guaranteed Debt is kind of somewhere in the middle. This is where another business or private individual acts as a Guarantor. Super short version of that is the main borrower defaults, the Guarantor is on the hook.
Even in its darkest days? GW, due to super low debt levels, would’ve had all those options open.
And that’s not raking into account Director’s Loans, which are another path to short, mid and even long term cashflow issues.
This is an accurate take - though your views on the sanctity of audited accounts are somewhat..... optimistic
There are a lot of bad takes on corporate financing and accounting in this topic, I think I'm going to have to go and cuddle a few IRFS' to recover from the trauma of reading it.
Azreal13 wrote: Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
It's interesting to see this information crop up and revist some older threads and debates such as the one I posted above. A lot of people at the time were pointing out that the then path GW was taking was not sustainable and was likely to cause problems. Seems a few commentors were a lot closer to the mark than they thought.
One the last line and not necessarily aimed at anyone in this thread, but it may suggest that having a corporate IP product become part of your identity could lead a person to see criticism of a company as an attack on the self...
Azreal13 wrote: Once more, and for the last time, both what is asserted by the guys in the video and the GW financial reports for the equivalent period can be true.
I am not, and, go back and look, never have, disputed the veracity of the end of year reports.
They can't both be true due to many of the things MDG listed above, but one in particular, who you and your side of the argument undervalue greatly.
GW had no to little debt.
4-6 weeks of liquidity left is not the same thing as 4-6 weeks to bankruptcy. Liquidity crisis can only be deadly if, and only if, you can't get a short term loan from anywhere, usually because you're drowning in debt already. Public company the size of GW, with their IP, with audited financial reports clean as theirs were, can go and get such a loan literaly anywhere they like. What is more - GW, even back then, would be welcomed in any investment bank in the world if they ever wanted to change their finance model from their self-financed-growth to growth-from-perpetual-debt. Companies with such healthy finances as GW has, had and will have as long as they are dominantly self-financed, have years long eventual downward spirals ahead of them.
This whole thread is just a haters wet dream and nothing else. And yes, two guys, even insiders, talking on the podcast about topics they were not responsible for, and which are completely outside their areas of expertise, are not even in the same league of credibility as official financial reports of public company.
Given the context I more or less took that to be what was intended? We have 4-6 weeks until we have to shut the doors unless we do something.
Much like all of the credible arguments at the time were GW is going to go out of business unless they do something.
You also have to remember that we're taking 8 or so years ago here, end phase Kirby, very early Rountree. Before the COVID bump, before share prices in double figures. GW showed flat to negative growth in this period too, albeit while maintaining a profit and paying a dividend.
There's also the question of the £15m that Peachy mentions, now that could represent a variety of things, but, if true, that represents about 20% of GW's annual turnover at the time.
So while, fundamentally, I agree, if things hadn't transpired as they have, they'd have probably found another solution, GW were, at the time, a shrinking company with a notable liability and, because they don't borrow, no track record for credit. Plus, of course, anything you borrow you have to pay back, and if you're looking at flat to falling sales forecasts that may not fill an accountant with optimism.
Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
Track record of credit is only a concern of individuals asking banks for loans, not public companies going out in search for a liquidity loan. And you even underline, that they were still making profit back then. Popular "no growth equals imminent doom" mentality is clouding your judgement here. Ask yourself this - why COVID was not only not a problem for GW, but a bump? The answer is exactly the same, as in the thread subject case - because they mantain very strict "no debt" policy, then in times of smaller or bigger crisis they have all the room in the world to "unless we do something". The event we're debating over in this thread was really small, and moreover, very common short term liquidity problem, not a bankruptcy perspective. "Unless we do something" back then was more like "unless we do literalily anything else apart of running around with our hands in the air, screaming".
Azreal13 wrote: Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
It's interesting to see this information crop up and revist some older threads and debates such as the one I posted above. A lot of people at the time were pointing out that the then path GW was taking was not sustainable and was likely to cause problems. Seems a few commentors were a lot closer to the mark than they thought.
Yeah its scary to think of how GW were at the end of the Kirby days.
In a way they were doing some of what Magic the Gathering and DnD are doing right now. Focusing on the short term profits at the cost of long term gains; resulting in ever shorter and shorter term thinking that often burns bridges and burns out customers. All until they finally tip things over and the bubble bursts. In GW's case that was when AoS launched and it was very clear that they made a slew of wrong choices and that isolation from the actual buying public as well as other marketing and management choices; had walked them down a very very wrong path.
In DnD's case we saw it when they tried ot take away the open licence
In the case of MTG they are still going strong, but the signs are there and already they did a whole "15cards for $1000" (or it might have been more than 15 but it wasn't many) which was a daftness. They are still going strong and in the milking phase; but still making choices that could result in them burning out.
nou wrote: Ask yourself this - why COVID was not only not a problem for GW, but a bump? The answer is exactly the same, as in the thread subject case - because they mantain very strict "no debt" policy, then in times of smaller or bigger crisis they have all the room in the world to "unless we do something".
I'm not sure that debt policies really had much to do with it. Covid was a bump for most hobby companies, because a lot of people were stuck at home and wound up spending more money on hobby products as a result.
Azreal13 wrote: Once more, and for the last time, both what is asserted by the guys in the video and the GW financial reports for the equivalent period can be true.
I am not, and, go back and look, never have, disputed the veracity of the end of year reports.
They can't both be true due to many of the things MDG listed above, but one in particular, who you and your side of the argument undervalue greatly.
GW had no to little debt.
4-6 weeks of liquidity left is not the same thing as 4-6 weeks to bankruptcy. Liquidity crisis can only be deadly if, and only if, you can't get a short term loan from anywhere, usually because you're drowning in debt already. Public company the size of GW, with their IP, with audited financial reports clean as theirs were, can go and get such a loan literaly anywhere they like. What is more - GW, even back then, would be welcomed in any investment bank in the world if they ever wanted to change their finance model from their self-financed-growth to growth-from-perpetual-debt. Companies with such healthy finances as GW has, had and will have as long as they are dominantly self-financed, have years long eventual downward spirals ahead of them.
This whole thread is just a haters wet dream and nothing else. And yes, two guys, even insiders, talking on the podcast about topics they were not responsible for, and which are completely outside their areas of expertise, are not even in the same league of credibility as official financial reports of public company.
Given the context I more or less took that to be what was intended? We have 4-6 weeks until we have to shut the doors unless we do something.
Much like all of the credible arguments at the time were GW is going to go out of business unless they do something.
You also have to remember that we're taking 8 or so years ago here, end phase Kirby, very early Rountree. Before the COVID bump, before share prices in double figures. GW showed flat to negative growth in this period too, albeit while maintaining a profit and paying a dividend.
There's also the question of the £15m that Peachy mentions, now that could represent a variety of things, but, if true, that represents about 20% of GW's annual turnover at the time.
So while, fundamentally, I agree, if things hadn't transpired as they have, they'd have probably found another solution, GW were, at the time, a shrinking company with a notable liability and, because they don't borrow, no track record for credit. Plus, of course, anything you borrow you have to pay back, and if you're looking at flat to falling sales forecasts that may not fill an accountant with optimism.
Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
Track record of credit is only a concern of individuals asking banks for loans, not public companies going out in search for a liquidity loan. And you even underline, that they were still making profit back then. Popular "no growth equals imminent doom" mentality is clouding your judgement here. Ask yourself this - why COVID was not only not a problem for GW, but a bump? The answer is exactly the same, as in the thread subject case - because they mantain very strict "no debt" policy, then in times of smaller or bigger crisis they have all the room in the world to "unless we do something". The event we're debating over in this thread was really small, and moreover, very common short term liquidity problem, not a bankruptcy perspective. "Unless we do something" back then was more like "unless we do literalily anything else apart of running around with our hands in the air, screaming".
So we agree that if they had actually run out of money then they had options? You're right of course, multinationals don't have a credit history per se, but equally a company that trumpets about never borrowing asking for a loan isn't a check in the "pros" column for a potential lender either. Let me be clear, I'm in no way suggesting GW wouldn't have been able to borrow their way out if needs be, simply that they weren't quite as appealing back then as they would be now.
The remarkable part, to me, is how close this apparently healthy company came to needing to, and how closely it echoes what some people were saying at the time.
nou wrote: Ask yourself this - why COVID was not only not a problem for GW, but a bump? The answer is exactly the same, as in the thread subject case - because they mantain very strict "no debt" policy, then in times of smaller or bigger crisis they have all the room in the world to "unless we do something".
I'm not sure that debt policies really had much to do with it. Covid was a bump for most hobby companies, because a lot of people were stuck at home and wound up spending more money on hobby products as a result.
That is not as easy as that. The biggest bump because of COVID entertainment spendings was in mobile games (as a graphic designer I hugely benefited from this), because of independency of this kind of production on anything material. But many smaller physical gaming companies, like e.g. Awaken Realms struggled to survive due to shipping prices hike alone (nearly 1000% hike in cost of sea shipping containers). There was a room to grow created by COVID, yes, but the ability of GW to seize it was due to huge financial stability they have due to no debt policy. In other words - they had the room to not care, that the world was going down in flames.
Azreal13 wrote: Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
It's interesting to see this information crop up and revist some older threads and debates such as the one I posted above. A lot of people at the time were pointing out that the then path GW was taking was not sustainable and was likely to cause problems. Seems a few commentors were a lot closer to the mark than they thought.
Yeah its scary to think of how GW were at the end of the Kirby days.
In a way they were doing some of what Magic the Gathering and DnD are doing right now. Focusing on the short term profits at the cost of long term gains; resulting in ever shorter and shorter term thinking that often burns bridges and burns out customers. All until they finally tip things over and the bubble bursts. In GW's case that was when AoS launched and it was very clear that they made a slew of wrong choices and that isolation from the actual buying public as well as other marketing and management choices; had walked them down a very very wrong path.
In DnD's case we saw it when they tried ot take away the open licence
In the case of MTG they are still going strong, but the signs are there and already they did a whole "15cards for $1000" (or it might have been more than 15 but it wasn't many) which was a daftness. They are still going strong and in the milking phase; but still making choices that could result in them burning out.
I came across a new-to-me term recently which I think may well apply to some of the companies that are behaving this way, which is "trust thermocline."
In essence, as your customer base feels hard done by, they'll grumble, but sales will remain largely unaffected. However, if those objections go unaddressed, they accumulate and sales will suddenly begin to drop off rapidly. It was the opinion of the guy writing the article that once that process begins, it's irreversible, and the best that can be hoped for is to arrest the fall before you hit the bottom. But it's never one thing, it's always an accumulation.
nou wrote: Ask yourself this - why COVID was not only not a problem for GW, but a bump? The answer is exactly the same, as in the thread subject case - because they mantain very strict "no debt" policy, then in times of smaller or bigger crisis they have all the room in the world to "unless we do something".
I'm not sure that debt policies really had much to do with it. Covid was a bump for most hobby companies, because a lot of people were stuck at home and wound up spending more money on hobby products as a result.
That is not as easy as that. The biggest bump because of COVID entertainment spendings was in mobile games (as a graphic designer I hugely benefited from this), because of independency of this kind of production on anything material. But many smaller physical gaming companies, like e.g. Awaken Realms struggled to survive due to shipping prices hike alone (nearly 1000% hike in cost of sea shipping containers). There was a room to grow created by COVID, yes, but the ability of GW to seize it was due to huge financial stability they have due to no debt policy. In other words - they had the room to not care, that the world was going down in flames.
This is true. I know a good few smaller firms shut down even when they were allowed to operate simply because they couldn't function. Either they couldn't get materials in or afford the increased costs to do business and shipping. Quite a few pulled in international orders because it was just insane to send stuff overseas. Even if customers could afford it the chances of packages getting stuck for utterly ages and being lost in the system was very high. This is the time where post offices had literal seas of packages undelivered and lasting for months at a time. That's a huge problem when customers come wnating a refund because the parcel hasn't arrived in weeks.
The healthy ones used the time to work on infrastructure; investing into growing or fixing things that needed fixing or improving. Much like how some cafes and pubs did new instalments of facilities and such.
Hobby spending was very healthy for "at home" hobbies, but at the same time many firms could not capitalise.
Of course some others did in the wrong ways - those exercise bikes with TV screens over-invested in infrastructure and killed themsleves when the bubble burst. Which is the other side of the coin and a big reason why I think we haven't seen GW invest in another new factory. That Covid bubble was going to burst, even if it left GW with more customers after. Heck we did see their share price drop down because they stopped being the rising star that was not sustainable
Azreal13 wrote: Once more, and for the last time, both what is asserted by the guys in the video and the GW financial reports for the equivalent period can be true.
I am not, and, go back and look, never have, disputed the veracity of the end of year reports.
They can't both be true due to many of the things MDG listed above, but one in particular, who you and your side of the argument undervalue greatly.
GW had no to little debt.
4-6 weeks of liquidity left is not the same thing as 4-6 weeks to bankruptcy. Liquidity crisis can only be deadly if, and only if, you can't get a short term loan from anywhere, usually because you're drowning in debt already. Public company the size of GW, with their IP, with audited financial reports clean as theirs were, can go and get such a loan literaly anywhere they like. What is more - GW, even back then, would be welcomed in any investment bank in the world if they ever wanted to change their finance model from their self-financed-growth to growth-from-perpetual-debt. Companies with such healthy finances as GW has, had and will have as long as they are dominantly self-financed, have years long eventual downward spirals ahead of them.
This whole thread is just a haters wet dream and nothing else. And yes, two guys, even insiders, talking on the podcast about topics they were not responsible for, and which are completely outside their areas of expertise, are not even in the same league of credibility as official financial reports of public company.
Given the context I more or less took that to be what was intended? We have 4-6 weeks until we have to shut the doors unless we do something.
Much like all of the credible arguments at the time were GW is going to go out of business unless they do something.
You also have to remember that we're taking 8 or so years ago here, end phase Kirby, very early Rountree. Before the COVID bump, before share prices in double figures. GW showed flat to negative growth in this period too, albeit while maintaining a profit and paying a dividend.
There's also the question of the £15m that Peachy mentions, now that could represent a variety of things, but, if true, that represents about 20% of GW's annual turnover at the time.
So while, fundamentally, I agree, if things hadn't transpired as they have, they'd have probably found another solution, GW were, at the time, a shrinking company with a notable liability and, because they don't borrow, no track record for credit. Plus, of course, anything you borrow you have to pay back, and if you're looking at flat to falling sales forecasts that may not fill an accountant with optimism.
Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
Track record of credit is only a concern of individuals asking banks for loans, not public companies going out in search for a liquidity loan. And you even underline, that they were still making profit back then. Popular "no growth equals imminent doom" mentality is clouding your judgement here. Ask yourself this - why COVID was not only not a problem for GW, but a bump? The answer is exactly the same, as in the thread subject case - because they mantain very strict "no debt" policy, then in times of smaller or bigger crisis they have all the room in the world to "unless we do something". The event we're debating over in this thread was really small, and moreover, very common short term liquidity problem, not a bankruptcy perspective. "Unless we do something" back then was more like "unless we do literalily anything else apart of running around with our hands in the air, screaming".
So we agree that if they had actually run out of money then they had options? You're right of course, multinationals don't have a credit history per se, but equally a company that trumpets about never borrowing asking for a loan isn't a check in the "pros" column for a potential lender either. Let me be clear, I'm in no way suggesting GW wouldn't have been able to borrow their way out if needs be, simply that they weren't quite as appealing back then as they would be now.
The remarkable part, to me, is how close this apparently healthy company came to needing to, and how closely it echoes what some people were saying at the time.
Again - liquidity problems =/= imminent bankruptcy. Both the studio I work in, and my wifes company had liquidity problems in times of steady growth because of client payments hickups, too rapid investing (not the same as overinvesting), sudden unexpected spendings or all of the above mixed. GW needing a liquidity loan to pay dividend is not a sign of being close to bancruptcy. It is a sign of mismanagement, yes, because someone up there did not pay enough attention to due dates and the margin of operation was too low. But again, typical companies operate on permanent debt and simply because GW does not, they have a huge upper hand. It also means, that they are a tax paying cow, so nobody will let them fall so easily. I don't know if the following is true in UK, but here in Poland, self-financing is often considered a bad practice, because credit cost is lower than taxes. Yes, that is correct, it is cheaper to operate on perpetual debt, than it is to operate with taxable profit.
It's really disappointing to see the direction the conversation here has gone. It was a genuinely interesting podcast with some real insight about why GW operates the way it does. The video title is something they joke about in the show. As for the contentious topic it's worth pointing out that the info about GW being in trouble was a throwaway comment early in the show.
If you look at the actual data GW's profits were at their lowest ebb in 2014 and they had an exceptional cost of £4.5 million that year. A lot of retail businesses lose money for 9 months of the year but make all their profit from Christmas shopping. It is not unbelievable to imagine that a sudden bill for £4.5 million might have put gw in a bit of a hole for a while before Christmas shopping dug them out of it.
The interview is full of interesting tidbits like why GW boxes are the size and shape they are. I really do recommend watching the whole thing. It's just a shame the plasma gun hair dryer never saw the light of day.
Azreal13 wrote: Ultimately, it's all hypothetical of course because they did turn things around, I simply found it interesting to hear from what I assumed would be trusted sources how close to needing to take serious action they actually were. But I appear to have stepped on ak ideological landmine in the process.
It's interesting to see this information crop up and revist some older threads and debates such as the one I posted above. A lot of people at the time were pointing out that the then path GW was taking was not sustainable and was likely to cause problems. Seems a few commentors were a lot closer to the mark than they thought.
Yeah its scary to think of how GW were at the end of the Kirby days.
In a way they were doing some of what Magic the Gathering and DnD are doing right now. Focusing on the short term profits at the cost of long term gains; resulting in ever shorter and shorter term thinking that often burns bridges and burns out customers. All until they finally tip things over and the bubble bursts. In GW's case that was when AoS launched and it was very clear that they made a slew of wrong choices and that isolation from the actual buying public as well as other marketing and management choices; had walked them down a very very wrong path.
In DnD's case we saw it when they tried ot take away the open licence
In the case of MTG they are still going strong, but the signs are there and already they did a whole "15cards for $1000" (or it might have been more than 15 but it wasn't many) which was a daftness. They are still going strong and in the milking phase; but still making choices that could result in them burning out.
I came across a new-to-me term recently which I think may well apply to some of the companies that are behaving this way, which is "trust thermocline."
In essence, as your customer base feels hard done by, they'll grumble, but sales will remain largely unaffected. However, if those objections go unaddressed, they accumulate and sales will suddenly begin to drop off rapidly. It was the opinion of the guy writing the article that once that process begins, it's irreversible, and the best that can be hoped for is to arrest the fall before you hit the bottom. But it's never one thing, it's always an accumulation.
Privateer Press I think is a very clear example of this latter point. They fell from being second to GW to now being honestly very tiny and strained.
It wasn't one thing but many things and some of them were indeed long lasting complaints such as their issues with shipping and soforth.
It's very rarely one thing that kills a business, but as you say a series of mistakes, bad choices, situations and such. Each one could be resolved and each one isn't a huge disaster on its own - but they do all add up.
I would add another layer which is that another death-nail is when a firm stops recruiting newblood. Esp a hobby firm ,but any really that stops getting fresh customers in and relies on an established customer base only. Unless you are an insanely big market leader; the moment you stop gaining customers; and you rely on sustaining yourself in established ones; is the time that you're at risk. Because those existing customers will only ever dwindle. Be it to drifting away; complaints unresolved; trying out other things; old age; shifting finances - whatever the reason its a slow death.
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Chikout wrote: It's really disappointing to see the direction the conversation here has gone. It was a genuinely interesting podcast with some real insight about why GW operates the way it does. The video title is something they joke about in the show. As for the contentious topic it's worth pointing out that the info about GW being in trouble was a throwaway comment early in the show.
If you look at the actual data GW's profits were at their lowest ebb in 2014 and they had an exceptional cost of £4.5 million that year. A lot of retail businesses lose money for 9 months of the year but make all their profit from Christmas shopping. It is not unbelievable to imagine that a sudden bill for £4.5 million might have put gw in a bit of a hole for a while before Christmas shopping dug them out of it.
The interview is full of interesting tidbits like why GW boxes are the size and shape they are. I really do recommend watching the whole thing. It's just a shame the plasma gun hair dryer never saw the light of day.
I think the interview deserves its own thread. This thread is really about one part of it and one niche aspect taken out and hyper-focused on.
I would add another layer which is that another death-nail is when a firm stops recruiting newblood. Esp a hobby firm ,but any really that stops getting fresh customers in and relies on an established customer base only. Unless you are an insanely big market leader; the moment you stop gaining customers; and you rely on sustaining yourself in established ones; is the time that you're at risk. Because those existing customers will only ever dwindle. Be it to drifting away; complaints unresolved; trying out other things; old age; shifting finances - whatever the reason its a slow death.
Which, very neatly, is something they talk about at length in the video and how that was a fundamental cause of GWs lack of growth.
nou wrote: Ask yourself this - why COVID was not only not a problem for GW, but a bump? The answer is exactly the same, as in the thread subject case - because they mantain very strict "no debt" policy, then in times of smaller or bigger crisis they have all the room in the world to "unless we do something".
I'm not sure that debt policies really had much to do with it. Covid was a bump for most hobby companies, because a lot of people were stuck at home and wound up spending more money on hobby products as a result.
That is not as easy as that. The biggest bump because of COVID entertainment spendings was in mobile games (as a graphic designer I hugely benefited from this), because of independency of this kind of production on anything material. But many smaller physical gaming companies, like e.g. Awaken Realms struggled to survive due to shipping prices hike alone (nearly 1000% hike in cost of sea shipping containers). There was a room to grow created by COVID, yes, but the ability of GW to seize it was due to huge financial stability they have due to no debt policy. In other words - they had the room to not care, that the world was going down in flames.
This is true. I know a good few smaller firms shut down even when they were allowed to operate simply because they couldn't function. Either they couldn't get materials in or afford the increased costs to do business and shipping. Quite a few pulled in international orders because it was just insane to send stuff overseas. Even if customers could afford it the chances of packages getting stuck for utterly ages and being lost in the system was very high. This is the time where post offices had literal seas of packages undelivered and lasting for months at a time. That's a huge problem when customers come wnating a refund because the parcel hasn't arrived in weeks.
The healthy ones used the time to work on infrastructure; investing into growing or fixing things that needed fixing or improving. Much like how some cafes and pubs did new instalments of facilities and such.
Hobby spending was very healthy for "at home" hobbies, but at the same time many firms could not capitalise.
Of course some others did in the wrong ways - those exercise bikes with TV screens over-invested in infrastructure and killed themsleves when the bubble burst. Which is the other side of the coin and a big reason why I think we haven't seen GW invest in another new factory. That Covid bubble was going to burst, even if it left GW with more customers after. Heck we did see their share price drop down because they stopped being the rising star that was not sustainable
Awaken Realms mentioned above had an open Kickstarter I backed - Etherfields. Second wave was delayed and the cost of shipping went up so much, that according to Awaken Realms themselves, it ate entire profit from this Kickstarter and they asked customers for "tipping" them for an extra token add-on. They survived due to the same policy of keeping away from debt as much as they can, but they came close.
H.B.M.C. wrote: Could be worse. Could be a company that does new Kickstarters so they can pay for the previous Kickstater, stuck on an endless downward spiral.
IIRC, that was what brought TSR down, basically. Releasing a new sourcebook so its profits would pay the printers for the previous sourcebook. It was when stores/distributors returned several unsold printruns all at once that all the bills came due and TSR didn't have the money.
H.B.M.C. wrote: Could be worse. Could be a company that does new Kickstarters so they can pay for the previous Kickstater, stuck on an endless downward spiral.
IIRC, that was what brought TSR down, basically. Releasing a new sourcebook so its profits would pay the printers for the previous sourcebook. It was when stores/distributors returned several unsold printruns all at once that all the bills came due and TSR didn't have the money.
KS grew on steep discounts. Super cheap product flooding the market.
Now I see more companies pulling back on that if the product is intended for the retail market because they've realised that undercutting the price for the retailer and flooding the market at the same time results in a death period after the KS fulfils where the market is satisfied with the product. Even if its something like a wargame where people will want more; many of the top buyers are burned out having just got a mountain of models. So they aren't rushing to the shops to buy and when the yare they are buying less because "Ohh this price is way higher I might wait till they do another KS" etc...
So I've seen more steadily reducing that insane deal unless its a product intended just to fund through the KS and then have either no or a limited retail shelf life.
H.B.M.C. wrote: Could be worse. Could be a company that does new Kickstarters so they can pay for the previous Kickstater, stuck on an endless downward spiral.
IIRC, that was what brought TSR down, basically. Releasing a new sourcebook so its profits would pay the printers for the previous sourcebook. It was when stores/distributors returned several unsold printruns all at once that all the bills came due and TSR didn't have the money.
It's what's called the Anna Karenina principle: while all functional enterprises fundamentally work the same (more money in than out, chiefly) there are about a million ways to tank a company, and almost everyone has been tried at least once
I would add another layer which is that another death-nail is when a firm stops recruiting newblood. Esp a hobby firm ,but any really that stops getting fresh customers in and relies on an established customer base only. Unless you are an insanely big market leader; the moment you stop gaining customers; and you rely on sustaining yourself in established ones; is the time that you're at risk. Because those existing customers will only ever dwindle. Be it to drifting away; complaints unresolved; trying out other things; old age; shifting finances - whatever the reason its a slow death.
Which, very neatly, is something they talk about at length in the video and how that was a fundamental cause of GWs lack of growth.
Yep, I believe also that that was the time when even the staff training, at least for the USA if I recall right, was focused on the newbie and when GW was shunning the old/established player. I believe the running theory was that GW were maximising on the idea of new people buying in and spending a lot and thereafter considered long term customers after their buy-in-period as a dead duck as their buying power (on average) reduced or even went to 0. A viewpoint, again like many I feel, born of looking at the sales numbers in an office and not looking at the customers to realise that those oldies who weren't buying (or indeed any customers who weren't) but who were playing; WERE a market that was vaible to keep around because they were running the clubs; providing games and soforth for the new buyers.
"Don't worry, we can just borrow more money" wouldn't be what I'd want my finance director to say.
Its entirely possible if GW already had £15m debt that banks might start getting nervous. Unit sales down, prices rising for at best the same (possibly slightly less) revenue. Whether banks would care is an open question but chatter on AoS is extremely hostile. Manufacturers generally don't want to be as geared as some other businesses due to the perceived higher risk/swing on sales. Profits are there for now, but may disappear quickly if the company were servicing more debt.
There's a difference in cash flow hits due to say slow payment by customers and because you are struggling to sell inventory. Maybe people are just "done" with GW products?
Clearly GW didn't go bust and dramatically turned the corner. But that doesn't automatically mean there weren't a lot of crisis meetings as suggested in the video.
What is interesting for me about this thread is the sheer *anger* and knives out, straight for the throat for the OP. I don't know why people feel the need to be so voracious about it. Even if the claims are bollocks, you have to look at the source and this isn't just a spiky bits article from an undisclosed source, and there is no need to make it personal over a multi-million $$$ corporation.
My own thoughts on it are that GW is in a far better place now than it was back then. Thinking back to the early 10s (which I guess could have had the financial knock-on to the period being discussed) I think there is a propensity to forget just quite how bad things were, certainly from a customer perspective. I believe on this very forum either 2010 or 2011 was dubbed 'the summer of terror' as GW seemed to fly in ever decreasing circles with its product range and declare war on its customers with one miss-step after another. Have a look at threads back then and N&R was filled with people bitching. So from that perspective, I don't know how much fo an impact that had on sales, but it has much more of a ring of truth to it than had this been about the mid 00's or even much more recently, where obviously things have improved a great deal, both for GW financially and for us as customers.
Pacific wrote: What is interesting for me about this thread is the sheer *anger* and knives out, straight for the throat for the OP. I don't know why people feel the need to be so voracious about it.
It's not that hard to understand: the thread is fundamentally about an issue that was hotly debated at that time, with lots of bad blood, namecalling and even people developping grudges that persist to this day (childish, but it is what it is - look into any current twitch stream that includes TOW news, and watch people being still bitter and going for each others throats about 'AoS killing WHFB', completely going from 0 to 100 in seconds and without any prompt). And the opening post, as well as the title, are more or less perfectly formulated to fan the flames of that old conflict again: 'Doomsayers were right after all' is literally in the title, as if this thread was aimed to pick up the conflict where it was, almost a decade ago. It's bait, and many people can't resist taking it.
Add to that modern PR customer relationships, having far more in common with cults than an actual custommer company relationship and you get people that are highly attached to an uncaring corporate moloch.
Not Online!!! wrote: Add to that modern PR customer relationships, having far more in common with cults than an actual custommer company relationship and you get people that are highly attached to an uncaring corporate moloch.
Yeah, that too. People get into parasocial relationships with brands, and the result is not pretty.
I recall those days where you used to wait until Friday night at around midnight UK time to then go look at the NZ GW webstore to see what were that weeks new releases. Where rumours and leaks were the only advanced info on new upcoming models and where GW was starting to send out CD letters to everyone - even news and forums (I think) got nasty letters when they were posting rumours.
It was a time when GW was not really caring about their long term fans; pulling back out of running or sponsoring events; hated the internet and was making a lot of wrong choices that would have sunk smaller firms.
The turn around when Kirby left and Roundtree took over was massive.
There was some good though. I'd argue that the choice GW made allowed their dominance to waver. It didn't destroy their dominance, but I think it did open the market up for smaller firms to get a foothold and establish themselves. I think it helped the market in general broaden and that's been maintained through to now even though GW have very firmly re-established their market dominance.
I think the next big phase will be when smaller firms (or basically firms other than GW) can push recruitment outside of established wargamers/hobbyists. Right now there's still a heavy reliance in many regions on GW being the gateway.
Granted I think that also goes hand in hand with the general hostility of the government to allowing highstreets to work which means unless you're a very big game store or basically a restaurant/cafe with games then its very hard to function (and means they are much more likely to lean into high profit card sales over wargames)
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Not Online!!! wrote: Add to that modern PR customer relationships, having far more in common with cults than an actual custommer company relationship and you get people that are highly attached to an uncaring corporate moloch.
I don't think its even modern. I recall brand cults way back in the 90s
Gert wrote: And there are people that are attached to hating that company at all times who gleefully drink in bad news and rub it it peoples faces.
Nobody is blameless and both sides of this discussion have acted childishly and have deliberately looked for arguments.
Yeah, the fault in this lies with the community as a whole, and its inability to have a civilized discussion. It's not enough to enjoy the stuff you like personally, other people have to acknowledge its superiority too, and have to hate what you hate
Modern in a historical sense. Afterall monopolies needed justification, always have.
hence why not copy the methods that are proven to work very successfully.
Granted the 90's been positively tame, compared to nowadays with the common constant social media bombardment.
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Gert wrote: And there are people that are attached to hating that company at all times who gleefully drink in bad news and rub it it peoples faces.
Nobody is blameless and both sides of this discussion have acted childishly and have deliberately looked for arguments.
honestly i think it's more caused by the way that GW attempts to insulate it's hobbiests from the rest of TG hobbies.
And by extention those that drop out of that, due to ... questionable desicions on gw's behalf suddendly get confronted with a far wider and more creative hobby, only to be frustrated by GW itself due to GW once being part of that too.
I don't think GW tries to insulate in any way other than GW just acts like every other firm in that their marketing only talks about their product and their views and their stuff. Because that's what marketing is.
Like all fandoms be it music, games, football or whatever a VAST majority of the "cult" like behaviour is purely down to how people act and choose to behave.
Heck go back and Football Hooligans were highly organised highly violent gangs. It has zero connection to footballs marketing, or team stuff; but it was 100% there. Even today you can get big fights between rival fan groups of different teams.
It's a human thing not a marketing thing and often behaviour that's discouraged by those engaged in the teams.
Same as how GW doesn't encourage you to go beat up Mantic fans. GW will never market Mantic games, but they don't want you to fight horrifically with the fans of the game and like as not many GW staff do and have collected those models from other ranges.
This is purely an element of how communities choose to behave and how community leaders tolerate and encourage certain kinds of behaviour. When it comes ot the internet its a bit more muddled because you can just go and become a community leader on your own site and encourage the behaviour you want.
There's also an element of trolling in that some people just like to argue, fight or otherwise start trouble. Especially online where it "doesn't matter its just words" and stuff like that.
Plus nothing gets an online conversation going than some controversy or argument.
Chikout wrote: It's really disappointing to see the direction the conversation here has gone. It was a genuinely interesting podcast with some real insight about why GW operates the way it does. The video title is something they joke about in the show. As for the contentious topic it's worth pointing out that the info about GW being in trouble was a throwaway comment early in the show.
If you look at the actual data GW's profits were at their lowest ebb in 2014 and they had an exceptional cost of £4.5 million that year. A lot of retail businesses lose money for 9 months of the year but make all their profit from Christmas shopping. It is not unbelievable to imagine that a sudden bill for £4.5 million might have put gw in a bit of a hole for a while before Christmas shopping dug them out of it.
The interview is full of interesting tidbits like why GW boxes are the size and shape they are. I really do recommend watching the whole thing. It's just a shame the plasma gun hair dryer never saw the light of day.
That's the problem with clickbait. It definitely works and gets people to click on whatever content its baiting regardless of quality. The problem is so much clickbait leads to terrible content that's entirely dependent on the clickbait that people build up a resistance and those people are going to judge you based on the wild claims being made in your headline rather than engage with any substance you actually provide. Boy cried wolf and all that, though in the case of YouTube its like a whole town trying to cry wolf the loudest.
Gert wrote: And there are people that are attached to hating that company at all times who gleefully drink in bad news and rub it it peoples faces.
Nobody is blameless and both sides of this discussion have acted childishly and have deliberately looked for arguments.
If you consider rejecting a claim that a successful, IP rich, profit marking organisation was 4-6 weeks away from going bankrupt due to a cashflow issue, when people have already stated numerous avenues for them to resolve the issue with only moderate pain, to be 'childish' then I guess it was. It simply doesn't hold up to any scrutiny with the evidence at hand. GW was not a 10 person SME nor a staggering ailing company that had leveraged itself to the hilt and sold off all it's assets. Ignoring the potential of serious fraud, those are the kinds of companies that get killed by cashflow issues.
Not Online!!! wrote: Add to that modern PR customer relationships, having far more in common with cults than an actual custommer company relationship and you get people that are highly attached to an uncaring corporate moloch.
I don't think its even modern. I recall brand cults way back in the 90s
The only loyalty I have is to the colors purple, white, and blue brother!
So that person is the reason GW has those pots? Congrats those faulty pots are the reason I dont bulk buy their paints no matter how good the formulas are they DOA when they dry prematurely inside the pots. He seems very happy to suggest that is done on purpose for people to spill etc and spend more money etc... I could suggest a place for him shove his trumpet.
NAVARRO wrote: So that person is the reason GW has those pots? Congrats those faulty pots are the reason I dont bulk buy their paints no matter how good the formulas are they DOA when they dry prematurely inside the pots. He seems very happy to suggest that is done on purpose for people to spill etc and spend more money etc... I could suggest a place for him shove his trumpet.
What struck me the most about that part of the interview was when he admitted that the black flip-top paints had effectively no seal.
If any other company had sold paints in a pot that didn't seal they would have gone out of business a long time ago
NAVARRO wrote: So that person is the reason GW has those pots? Congrats those faulty pots are the reason I dont bulk buy their paints no matter how good the formulas are they DOA when they dry prematurely inside the pots. He seems very happy to suggest that is done on purpose for people to spill etc and spend more money etc... I could suggest a place for him shove his trumpet.
What struck me the most about that part of the interview was when he admitted that the black flip-top paints had effectively no seal.
If any other company had sold paints in a pot that didn't seal they would have gone out of business a long time ago
Absolutely crazy
Insane for sure and he actually feels proud of himself. How can you be proud of prototyping and spending years developing a pot that he admits is not aimed for the painters purpose but rather to make people just buy more because of its faults. Unbelievable.
Any goodwill I could possible have towards this just vanished. It's not a case of a team doing the best they can and just falling short... no, its done on purpose.
Yeah. This guy, his behavior isn’t very ethical. But people should really aim their ire at GW. Any respect you lose for that guy should be minor compared to the eye-opening you should feel about GW, the company so many are quick to defend.
BobtheInquisitor wrote: Yeah. This guy, his behavior isn’t very ethical. But people should really aim their ire at GW. Any respect you lose for that guy should be minor compared to the eye-opening you should feel about GW, the company so many are quick to defend.
Please can we not turn this into a "GW is bad! vs GW is good!" debate?
They've done plenty of good and bad things over the years, it's not anywhere near as black and white as some would like to claim.
I watched the video the other day and really enjoyed it, theres a lot of insight into the product creation process.
Its entirely possible for a company's cashflow to become a problem. Where they look at the projected sales for the next month and worry about how they are going to pay the bills due in that period.
The fact GW took out a loan to pay dividends shows that they didn't have funds on hand at the time. A meeting taking place were senior staff are told we need a boost to sales in the short term shouldn't be hard to believe.
We know with hindsight that things did pick up, they payed off that loan and the financials all looked rosey come the end of year report.
Tamereth wrote: The fact GW took out a loan to pay dividends shows that they didn't have funds on hand at the time.
Yep. And the most important part of that is GW borrowed money to immediately give to shareholders. Not to finance growth that requires a major up-front investment but will pay off in the long run, they just flushed that money down the toilet to reassure the shareholders that everything is fine. If you're having to borrow money for that then it's a giant red flag that things are not fine for the long-term health of the company.
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Overread wrote: I don't think GW tries to insulate in any way other than GW just acts like every other firm in that their marketing only talks about their product and their views and their stuff.
I think they absolutely do, just in a more subtle way than "{rival product} sucks you're an idiot if you like them". GW trying to pretend they're a separate hobby apart from the general miniatures hobby is why they're so invested in their retail chain. They want total information control and a locked-down process where people build GW models with GW tools, paint them with GW paints, and play with GW terrain on GW mats in a GW store. The whole reason they have all those overpriced tools that sell for half as much at your local art supply store is that they never want a customer to have to go outside the GW bubble to find something. And they really don't want you going to an independent store where you might discover whole product ranges that compete with GW. They'd rather keep a ghost town of a store open than allow those remaining customers to go to the thriving independent store nearby.
Contrast this with the old days when GW actively encouraged leaving the GW bubble and acknowledged the wider hobby. GW used to sell books on how to make your own terrain from household objects, how to use non-GW paints and tools where appropriate, etc. Now that's all gone. If you want terrain you buy an official GW kit and build it exactly according to the instructions. To paint your models you use only GW paints, even though we've seen on-camera proof that GW's studio painters use other brands. The sand box is gone and replaced with a sanitized corporate-friendly theme park.
NAVARRO wrote: So that person is the reason GW has those pots? Congrats those faulty pots are the reason I dont bulk buy their paints no matter how good the formulas are they DOA when they dry prematurely inside the pots. He seems very happy to suggest that is done on purpose for people to spill etc and spend more money etc... I could suggest a place for him shove his trumpet.
What struck me the most about that part of the interview was when he admitted that the black flip-top paints had effectively no seal.
If any other company had sold paints in a pot that didn't seal they would have gone out of business a long time ago
Absolutely crazy
What is weird is that the oldest functional paint pot I have is a black flip-top! Chainmail. Still a little left in there, too. I'm afraid to use it at this point.
Commissar von Toussaint wrote: What is weird is that the oldest functional paint pot I have is a black flip-top! Chainmail. Still a little left in there, too. I'm afraid to use it at this point.
I have a box full of the old paints that I wasn't using up so I had them when I revisited the old armies that I used them for... I haven't been game to open many of them, but I suspect most of them will be solid by now. I did manage to recover one of two pots of Snot Green.
I suppose I should also address the OP, and to that I have to say: appeals to authority carry zero weight with me. I've seen so many "sure thing" financial enterprises that were guaranteed sound by all the right people go south, that it's gotten boring.
Indeed, the more pure, perfect and exemplary they look, the more suspicious I become, particularly if government auditors are cited as proof. See also: savings and loan crisis, tech bubble, Enron, housing bubble, etc.
So yes, maybe GW's financials are the envy of all humanity, but it's also possible that they were also never truly put to the test, and the lovely investor information page was a few weeks from being yet another cautionary tale. Maybe Kirby will spill the beans on his death bed, otherwise we probably will never know for sure.
I watched the Painting Phase video, and fully expected the internet to seize on that point.
The approach that Peachy and co take in the Painting Phase is pretty balanced. They enjoy the hobby; they don't push an anti-GW agenda, and will frequently rubbish the more extreme stuff that gets said. But they are happy to discuss GW's many shortcomings - often (thanks to Peachy and his contacts) with a lot more authority than other Youtube sites. They also tend to give their guests plenty of space to speak for themselves. I think there is a tendency to use clickbait titles for their videos, but they admit to doing this. So attacking the Painting Phase as the source of this isn't fair.
People who haven't worked in large organisations don't seem to understand how they function. Different departments will always have their own agendas. And everyone who is running a department tends to think that everything revolves around them. Internal messaging is rarely transparent, and messaging from management even less so. While it is possible that senior management were indeed becoming seriously worried about sales and cashflow, what was said to Tom Hibberd may well have been exaggerated (and perhaps intended to provide additional motivation).
None of this means that GW wasn't at risk of crashing and burning (look at what happened to Airfix). It just doesn't really seem like a big revelation.
I wonder if the 4-6 weeks door closing is just a misunderstanding about the scope.
So the source is part of the design team, and we know that the design team are working on stuff with a pretty long lead time (easily 12+ months in most cases). So I wonder if the management talking about closing the doors was talking about closing the design team for a while, and not the entire company.
It'd hurt them later, but they could probably get away with some slower realeases in a year if they could save some money now by closing a few departments for a month or 2.
Herzlos wrote: I wonder if the 4-6 weeks door closing is just a misunderstanding about the scope.
So the source is part of the design team, and we know that the design team are working on stuff with a pretty long lead time (easily 12+ months in most cases). So I wonder if the management talking about closing the doors was talking about closing the design team for a while, and not the entire company.
It'd hurt them later, but they could probably get away with some slower realeases in a year if they could save some money now by closing a few departments for a month or 2.
Could be true, but it's still just as bad. Shutting down the design team for a month or two would save a tiny amount of money relative to GW's total annual revenue. If they're so desperate to cut costs that they'll take a future disruption to the release schedule for such minor savings that itself is a major red flag.
I enjoyed watching that video and actually learned how I'm supposed to be holding my GW Painting Handle, so thanks for that!
I find it bizarrely hilarious that both Peachy and this other guy still talk about GW like they are working there even though both quit some time ago. Cult brainwashing, anyone? j/k
The most important bit for me was learning about the "Hobby Trumpet". It explains eloquently so many baffling things GW does, and also puts me "squarely in my box" as a customer (basically I mean nothing to them and they do not make products for the likes of me). I like honesty, and that's as honest an answer I can hope to get from the company. They sell toy soldiers to 12-15 year olds, everything else is a lie.. Guess that makes me a chump, they got me hooked when I was that age, and now I'm just old and stuck in my ways LOL
Kind of puzzling though, how Tamiya and Mr Hobby, both respectable Japanese hobby brands, manage to create screw caps for their paints that actually seal? (My Tamiya X1 Black is 15+ years old and still going strong) Must mean that perhaps these GW boffins aint as good at their job as they think
Some really dumb takes in here. "HuRR jUsT tAKe LoAn" while ignoring the fact that self-financing company like GW needing a loan at all is like a Titanic that already hit the iceberg head on and righting the ship will take more than just "tAKe LoAn" (and if anything, loans could sink them even faster as these things cost a lot and would decrease confidence of retailers taking their products substantially). If they already started taking loans for such dumb things as dividend, yeah, dude is 100% right and there probably was a huge hole in sheets that was only masked with big cash inflow later - and if that inflow didn't happen, the company might very well go under.
Especially seeing the "tAKe LoAn" types forgot how the situation looked back then - WFB was making losses, then was dead, AoS failed to take off, 40K sales were tanking due to excessive kit milking (Dire Avengers and Greatswords, hello?), what would this loan even do? Make the company stay alive 8 weeks instead of 4-6? What was needed was a huge change of direction, and new crew did a lot of good decisions on that. It's like claiming a driver who manages to swerve and avoids hitting the wall at last second is somehow 'proof' that the wall was never dangerous to begin with and a little of extra wax on bodywork would allow the car to ram straight through undamaged
Tyel wrote: Pretty clear 2014-16 was not a healthy time for GW - but equally, from the accounts, they were stagnating, not drowning. A short term cash crisis is however entirely possible if there were some lean months without much going on. I think they turned the corner with the Deathwatch Overkill box (Feb 2016?)
No, they started with Start Collecting boxes (which at the time was a massive bargain) followed by series of Holiday troop+vehicle discount boxes (still have Dark Angel one which was tactical squad+rhino+DA sprue for about the same tactical squad costs on its own today...). Both were so sudden and unexpected (plus just not how GW did things back then) the hole in the sheets forcing them to do it would be pretty much perfect, logical explanation. Both ended up printing money for GW so hard company literally couldn't make them fast enough (which would easily hide said hole in end year balance sheet, too...). Then you had Vs boxes with two armies that were 50-66% off individual kit price, also a massive seller. Anyone still remembers two Horus Heresy boxes, too? Literal mountain of minis for pennies, it's just sad comparing it to barely discounted boxes today...
And come to think of it, if the massive cash influx due to SC and VS boxes doesn't show up on investor balance sheets either until much later, something had to negate it. Gee, what could it be? Maybe, just maybe, it was the hole the dude mentioned the 'experts' here deny, eh?
I don't think it's that difficult to understand that being "former GW employees" doesn't make this objectively correct just because of that. They may very well have been told this or something along those lines at the time, but without any actual evidence beyond that then taking it at face value as being outright the case irrefutably is a bit odd. This is what someone, who wasn't directly involved in that financial aspect themselves, would have been told by others at that time so someone or something could easily have been a misunderstanding, misinformed, misremembering, hypothetical etc.
Why on Holy Terra anyone would tell this nonsense to employees if it wasn't 100% true?
Not only it's perfect way to tank morale, it's the best way to ensure your workers will barely do any work and will be instead desperately updating resumes and looking for openings in other game companies, especially senior positions like interviewed dude who could change jobs the easiest when you desperately need them fully onboard and trying their hardest, not being distracted doing 20 other things that don't help the company when you need them at 100% performance. And misunderstanding? You seriously thing that senior positions called to rescue meeting wouldn't attempt to clarify or gauge if it really is that bad before formulating plans for their departments to follow? Really?
Irbis wrote: Some really dumb takes in here. "HuRR jUsT tAKe LoAn" while ignoring the fact that self-financing company like GW needing a loan at all is like a Titanic that already hit the iceberg head on and righting the ship will take more than just "tAKe LoAn" (and if anything, loans could sink them even faster as these things cost a lot and would decrease confidence of retailers taking their products substantially). If they already started taking loans for such dumb things as dividend, yeah, dude is 100% right and there probably was a huge hole in sheets that was only masked with big cash inflow later - and if that inflow didn't happen, the company might very well go under.
This matches my experience with businesses. Lines of credit don't just magically materialize, and companies who draw on them regularly (and pay them off regularly) are different than companies who famously avoid them suddenly developing a craving.
This would be doubly true of a toy company. Back in the day, I remember people linking UK financial stories about GW's excellent stock, how the company kept growing, increasing market capitalization. It was clear that no one in finance really understood how or why they were succeeding, but the dividends were excellent. As soon as that aura of invincibility is punctured, I'm pretty sure their market cap would collapse.
And your remark about the financial reports is also spot on: these are always lagging indicators, not real-time disclosures. By the following mid-year or year-end report, GW clearly righted the ship. No company is ever going to say: "yeah, the quarterly report looks good now, but man we almost tanked."
